The mining camps of the future could have "user-pay services" where workers can choose to upgrade to a larger room or pay for other benefits, according to the company that will run Rio Tinto's Pilbara mining villages for the next 10 years.

French group Sodexo was chosen on Wednesday to run all of the villages for Rio's iron ore division in the Pilbara region of Western Australia, in a deal estimated to be worth $2.5 billion over its 10-year life.

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The decade term is much longer than the traditional three- or five-year contracts to run the FIFO villages, and is one of several ways Rio and Sodexo were able to strike a deal competitive for both parties.

Contractors to the mining industry have been enduring tough times as the commodity price downturn has prompted miners to rein back spending and demand cheaper rates.

The FIFO lifestyle has changed for many mine workers over the past year, with many companies, particularly in the iron ore sector, changing rosters to ensure employees work more days each month than they did during the peaks of the mining boom, when companies offered generous terms to attract labour. Photo: Bohdan Warchomij

When asked how Sodexo would manage to operate the Rio contract in such austere circumstances, the French company's global mining division chief executive, Johnpaul Dimech, said that "user pay services" were one possible way to improve the business of running FIFO camps.

"It is really about making sure we are addressing the needs of the client and also the needs of the consumers," he said. "That also opens up an opportunity in the future to look at user pay services which could really help us get closer to the consumer and provide them with value added services which really brings the city to the villages and the towns.

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"[We want] to give the consumers choice about how they want to find the comforts of home and the services, whether it is options on bed type, or whether it is gear-dressing services or consulting services.

"Our objective is to provide quality-of-life services to our consumers and to our workforce as well."

Lifestyle change

﻿The FIFO lifestyle has changed for many mine workers over the past year, with many companies, particularly in the iron ore sector, changing rosters to ensure employees work more days each month than they did during the peaks of the mining boom, when companies offered generous terms to attract labour.

It is believed that management of Rio's iron ore camps was previously split among four providers, including Sodexo and a subsidiary of Compass Group, but Wednesday's deal will put all camps and villages under Sodexo's management,

Sodexo has previously run some of Rio's FIFO villages in the Pilbara, but the new 10-year contract will see them run all of the company's iron ore camps in WA

It is believed Sodexo beat rivals like Spotless Group to win the lucrative Rio contract, which is the largest of its type that Sodexo has signed.

Cost benefits

Rio Tinto iron ore chief executive in Australia Andrew Harding said the contract would deliver improved services as well as significant cost savings.

"We are continuing to identify safer, smarter and more cost effective ways that will best position our Pilbara iron ore business for the future," he said.

Aside from running FIFO camps, the contract will require Sodexo to service all Rio offices and accommodation at the Cape Lambert port, handle waste management and even run the remote aerodromes that iron ore workers are flown into.

The Rio contract comes barely four months after Sodexo landed another coup in the form of the contract to manage accommodation and other services on Shell's Prelude floating LNG plant.

Sodexo has also worked for Woodside Petroleum and BHP Billiton among other resources companies, and the Rio contract will not prevent it from signing further deals with other iron ore miners.